FROM: BETH HANSEN CHIEF OF STAFF
Two months ago Governor John Kasich introduced his executive budget proposal for the upcoming 2014-2015 fiscal years. In it, he proposed major, needed improvements that build on the momentum of the past two years—two years that have seen Ohio get back on track by creating more than 130,000 new jobs and closing an $8 billion budget shortfall.
Characteristically, the governor’s budget doesn’t shy away from breaking the business-as-usual mold that has, for too long, held back Ohio. This memo provides a quick overview of those major reforms and where they stand at this point in the budget-writing process:
HIGHWAY FUNDING REFORM: More Projects Sooner
Governor Kasich’s plan to leverage the Ohio Turnpike to help fill the state’s $1.6 billion highway budget deficit is essential to keeping Ohio’s economy moving. On March 21, 2013, the General Assembly passed Ohio House Bill 51, the Transportation Budget, ensuring the quality of the future of our state’s highways and on April 1 the governor signed it into law. As we continue to create jobs, our state’s transportation network must be able to effectively accommodate the needs of Ohio’s businesses in order to remain a tool for economic development opportunities. With the passage of the Transportation Budget, we believe Ohio is a more appealing location for industries to thrive. Read the governor’s statement on the passage of the Transportation Budget here.
HIGHER EDUCATION FUNDING REFORM: Increasing Graduation Rates
Ohio’s college graduation rate lags the nation’s, which hurts both workers seeking jobs and Ohio companies looking for skilled workers. To help fix this, Governor Kasich tasked Ohio State University President E. Gordon Gee with leading the state’s public college and university presidents to develop a new higher education funding strategy that incentivizes them to focus more on degree completion, not just enrollment. The new proposal bases 50 percent of future state funding to four-year institutions on degree completion, and puts our community colleges on track toward funding based on course completion and away from funding based upon enrollment. These ideas have been well-received in the General Assembly.
K-12 EDUCATION: Improving Student Achievement Everywhere
The governor’s budget proposal provides $1.2 billion in new funds to schools under a new student-focused funding formula. No district receives less than it did last year and students receive the resources they need to achieve no matter where they live. Amidst robust discussions on a topic that always generates strong views, we’re encouraged by the progress that is being made and anticipate the House and Senate will engage in constructive ways that further our shared goal of enacting a school funding formula that is constitutional, sustainable, and puts children first.
MEDICAID EXPANSION: Caring for Vulnerable Ohioans & Reducing Obamacare’s Impact
Ohio has been given the opportunity to provide much needed health care to vulnerable Ohioans at no cost to the state for the first three years. This plan is not only good for those vulnerable Ohioans who need care, but failure to enact it could result in a negative impact on hospitals and drive up health insurance costs on top of the impact of other Obamacare provisions. Ohio’s major chambers of commerce, as well as numerous leading hospital, doctor, and health care advocacy groups, have endorsed the effort and it’s currently being debated in the House. Progress continues to be made but our work is not yet finished. We encourage all those who appreciate the importance of this proposal to weigh-in with their legislators and urge their support.
TAX REFORM: Cutting taxes to create jobs
Since Governor Kasich took office in January 2011, Ohio has created 135,300 jobs. This success is the result of the hard work and creativity of Ohioans, as well as the governor’s dedication to creating a jobs-friendly climate. The governor’s last budget cut income taxes and eliminated the estate tax, and this budget builds on that momentum by proposing additional income tax cuts and a 50 percent tax cut for small businesses. Continuing to cut taxes is essential if we want Ohio to keep creating jobs and there is consensus among legislative leaders for that. The Administration is open to other approaches to tax cuts as long we keep making solid progress.
We’re pleased with the progress that the governor’s budget is making through the Legislature. Bold reforms that shake up the status quo inevitably cause heartburn for some, but the governor doesn’t believe in just accepting things the way they come if a better way can be found. This budget provides a “better way” on key issues that keep Ohio’s economic recovery moving and sets the stage for sustained prosperity for a long time to come. We look forward to continuing to work with the House and Senate as they contribute to the budget process and are confident that the end product will provide continued, significant support to Ohio as we work to get our state back on track.